Personal loans are unsecured loans. You can avail this loan without any security. These loans are taken to fulfill personal and professional needs. Usually the tenure of this loan is short and you can get a personal loan up to a maximum of 5-7 years*. Although a personal loan helps you in times you need money, it is very important to know few aspects of these loans. Below listed are 5 important aspects that you must know about personal loans;
Providing Security towards Loan:
A personal loan is an unsecured loan. But that shouldn’t stop you from finding if the Bank/NBFC accepts a security/collateral for the loan. If that is possible then you can get this loan at a cheaper rate of interest which would mean lesser EMI’s.
Always compare the rate of interest:
You need to always do your research well. Find out about Banks/NBFC’s which offer you a lower rate of interest. If your credit score is good, you can always negotiate with those Banks/NBFC’s to further reduce the interest rate. This will help you save a lot of money.
While researching you need to consider 2 loan options i.e. loan with a fixed rate of interest throughout the tenure and loan with a floating rate of interest. Both have their own advantages and disadvantages. Study well and accordingly make the correct choice.
Research about processing and pre-payment fees:
There are many costs associated with taking a personal loan. Always keep note of them. These costs begin with the processing fee, pre payment fees etc. Hence know about these charges first hand so you can be prepared.
Good relationship with Bank/NBFC:
If you are a good customer with the Bank/NBFC and have a good relationship with them, it helps you get good discounts and waivers. These waivers can be in form of reducing the processing fees, lowering interest rates and pre payment charges etc.
Although personal loans are a boon when you really need the money, it is important to know everything about it before you could sign the form. Take everything in writing so that you have proof. Also, always negotiate for the interest rates and get the best deal. To know about how to apply for a personal loan, click here